PERISCOPE, FORMER CEO SANDS NEARING SETTLEMENT OF CONFLICT
Byline: Vicki M. Young
NEW YORK — Periscope and its former chief executive officer are in the process of finalizing a settlement of their legal dispute that would allow Glenn Sands to continue working in the apparel industry.
On July 7, a Manhattan federal district court judge granted Periscope’s request for a preliminary injunction to temporarily bar Sands from participating in a competing “women’s, juniors or children’s clothing” business. The injunction would have continued in effect until their dispute was resolved at trial.
The settlement, expected to be finalized today, according to lawyers for both sides, would void the injunction and let Sands continue working at Global Air Inc. Global Air, which does business as Global Inc., is a women’s and children’s sportswear manufacturer started by Sands after leaving Periscope in April.
As part of the injunctive order, Sands was enjoined from “soliciting or dealing with any existing or prospective customers, suppliers, manufacturers, makers or contractors of Periscope.” Sands was also barred from hiring or retaining any employee of Periscope and from disclosing any of Periscope’s trade secrets.
Sands also was ordered to return to Periscope any garment samples, files or copies of confidential business information that are still in his possession.
As first reported in these columns, Sands filed a lawsuit in May against Periscope, alleging wrongful termination from the company he founded and seeking unspecified punitive damages. Periscope, owned by Giant Group Ltd., countered in June with counterclaims alleging “systematic embezzlement of Periscope’s funds.”
Giant, which purchased Periscope in December 1998, said in April that it had terminated Sands and taken a $28 million write-off for its investment in Periscope, an importer of moderately priced women’s and children’s wear.
Although in default on its factoring agreement at the time, it reached a factoring agreement with Century Business Credit Corp. late in April
In 1999, Giant lost $46.3 million, including the write-off of the Periscope investment. Sales at Periscope, which makes primarily private label products, reached $76.6 million last year.
Periscope’s current management earlier told WWD that it wants to expand sales to $90 million to $100 million this year. Its biggest accounts are The May Department Stores Co., Federated Department Stores, Belk Department Stores and Dillard Department Stores Inc.